“But if thought corrupts language, language can also corrupt thought.”
― George Orwell, 1984
A goal and an objective are interchangeable terms, even some dictionaries define a goal as an objective, but strictly speaking they mean different things. On BSC Designer we talk a lot about strategic things, including goals and objectives, so let’s have a clear understanding of the difference and why it is important. It’s good to have your team speaking in the same business language. Moreover, business owners and executives that understand the difference will be able to come up with more balanced ideas about where their business wants to go and how it will get there.
What’s the difference between a goal and an objective?
A goal is a general direction where a company or an individual wants to go; a goal is broad, intangible, and abstract. A top level goal for the company is a vision. In the contrast, an objective is specific, tangible, and measurable item. A company might have several important goals and many more objectives.
Your goal might be: Learn the Balanced Scorecard method.
- This goal is intangible as it is not really clear what “learning” and “Balanced Scorecard” in this case mean. Does it involve reading books, passing courses, learning best practices, taking part in the real BSC project or something else?
Your objectives might be:
- Name all the steps of the Balanced Scorecard according to “Strategy Maps” book by Norton and Kaplan
- Pass a BSC Designer software proficiency training with 80% score result.
These objectives are specific, tangible and measurable.
Why is the difference important?
It is obvious that any executive needs to have both goals and objectives in his or her toolbox.
- Without goals all the business will be about having long to-do lists with no focus on the big picture;
- Without objectives an organization will have a good wish list with no action plan.
They say that goals are great motivational tool. The trust is that different people are motivated in a different way. For example a vivid Amazon’s vision “to be Earth’s most customer-centric company for four primary customer sets” might be really inspiring for marketing people, but some technical person might say “Great! And how do we know that we are there? How are we supposed to do that?”
I would say that for some type of persons clearly defined objectives motivate even more than a company’s goals. Both goals and objectives need to be defined not only for motivation purpose, but for building a clear picture of where a company wants to go, how it will get there and how it can know if it is on the right track.
Finding a mission statement that will motivate your team
Before doing anything else, I’d recommend starting with a mission statement. If you think that finding a good mission statement is hard, try the approach described in this article. Instead of reinventing the wheel we asked those who were already working on the project if they ever mentioned the project to others, and if yes, what words did they use to describe it. These two simple questions were enough to understand what actually motivated people to participate and why this project was special for them.
Mission can and should change
Hopefully your company grows not only from the viewpoint of financial performance, but also from the viewpoint of leadership maturity. It implies the need to update your mission as well, as something that inspired your team in the beginning might not inspire it today. A good example is how the brand promise of Zappos changed over the years. Company’s CEO Tony Hsieh talks about that in his book:
- 1999 – Largest Selection of Shoes
- 2003 – Customer Service
- 2007 – Personal Emotional Connection
- 2009 – Delivering Happiness
Could Zappos or any other company start with such a brand promise like “delivering happiness”? I don’t think so…
- In 1999 Zappos needed something more tangible (like “provide largest selection of shoes”) that was a good function-oriented mission.
Zappos implemented a focus on the client in their business DNA and by 2009 “Delivering Happiness” was the best explication of their brand promise or mission.
Goals and objectives in the business
Talking only about goals and objectives a company won’t change a situation. Let’s see the way that one needs to go from a vision statement to get end results.
- We start with a company’s vision. A vision is a top-level goal of the company. Technically this statement is correct, that’s what numerous books on management define it as, but in the real life it is hard to find any meaningful vision statement. Check out some thoughts by Bernard Marr on the topic.
- Next, we are moving on to goals. Here is no need to squeeze all the ideas about the future of the company into one vision statement; hopefully the company has a solid list (or map) here.
- The question, “How these goals supposed to be achieved?” is answered in company’s strategy.
- The strategy is built from specific objectives – steps that a company needs to follow. To focus on a strategy, a company puts objectives on a strategy map and, if we follow the Balanced Scorecard method, it links them with each other with cause-and-effect connections.
- As we discussed above, objectives are measurable, so any objective can and should be aligned with a KPI that will tell to what extent an objective is achieved.
- Objectives tell us about the result that should be achieved, but they don’t tell us how exactly this result will be achieved. We need a tactical tool on this stage; let’s call it an action plan, it might be a general one or a detailed to-do list.
- Once an action plan is executed an end result is achieved, and management can revise a situation as needed and set new goals and objectives.
I was writing about a similar topic in “The big picture about Balanced Scorecard.” Check it out to see how the ideas from this article apply to the Balanced Scorecard concept.
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Cultural context might be different
Another reason why the explanation above is important is that in some languages there is no adequate translation of words “goal” and “objective.” For example, in Russian there is just one word for both “goal” and “objective:”
The difference between two ideas needs to be explained and cannot be simply translated. The next time you will be sharing your strategic goals and objectives with your team, make sure that you have explained the difference between these two terms first.
“Business Goals” tab in BSC Designer
Here are a few words for users of our BSC Designer software. In BSC Designer we have a tab called “Business Goals.” Obviously, it should be renamed to something like “Business Goals and Objectives.” We did not do this because we simply don’t want to take up all the free space by using long names for tabs. Using “Business Objectives” is not an option either, first the word “Objectives” is longer than “Goals,” and the main reason is that it will confuse users again this is tab where one can add both goals and objectives.
Steps 1-6 as described in the paragraph “Goals and objectives in the business” can be automated in BSC Designer. On the “Business Goals” tab one can map business goals and objectives, align them with KPIs and action plans and represent them on the strategy map. Here how it works.
Terms “Goal” and “Objective” are different. It is important to know and use the difference to talk in the same business language, to motivate your people better and to come up with a more logical strategic plan. Goals are the building blocks for a strategy, check out A Long List of Goals vs. a Strategy article to learn more about how to use goals properly.
What do you think? How do you use these two terms? Probably you can share your favorite example of a good goal or objective.